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businesses advantage over their Hong Kong counterparts: Chinese parties can obtain indirect enforcement of Chinese judgements in Hong Kong courts because the common law is more generous to foreigners than Chinese law in this respect. We also need to consider the advantage of getting in place now effective and

fair arrangements which could continue after 1997 rather than

Leaving this as a matter to be regulated between China and the

SAR.

5. We should be grateful for your thoughts on all of the above.

We are not suggesting that we need to rush ahead. In the first

instance, we would suggest further research by Keller's

successor to identify areas in which cooperation might usefully be developed and pitfalls to be avoided. In the meantime, the informal dialogue with the Supreme People's Court begun by Mr Keller could be continued, perhaps including arrangements for information exchange.

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